Kiwi Retail Sector And 5 Related Stocks- WHS, HLG, BGP, KMD, MHJ

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Kiwi Retail Sector And 5 Related Stocks- WHS, HLG, BGP, KMD, MHJ

 Kiwi Retail Sector And 5 Related Stocks- WHS, HLG, BGP, KMD, MHJ

Source: Dmitry Kalinovsky ,Shutterstock

A country’s retail sector in an integral part of its economy, wherein, the retailers act as the endmost locus in the supply chain before the product/service reaches the customer whether local or international.

Speaking of the pre-COVID 19 times, the retail sector across the globe was growing by leaps and bounds, but with the pandemic hitting the shores, this sector was one of the first ones to experience a prick. The novel coronavirus has reshaped this industry and rewritten the rules of business operations.

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From NZ’s perspective, the country’s retail sector did witness a little softness during the first few months of the lockdown in 2020. But with the arrival of 2021 earmarked with the easing out of restrictions, the sector is again seeing the road to revival.

According to Statistics NZ, in Q4 of 2020, New Zealand’s retail sales climbed 4.8% Y-O-Y. Sales for retailing of electronic goods were recorded at 21%, for motor parts & vehicles at 9.3% and departmental stores at 8.5%, to name a few.

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Emergence Of New Trends in NZ Retailing

With lockdowns and restrictions now becoming a new norm, the country saw a surge in innovative trends during shopping. Focusing on customer safety, many retail stores are introducing new customer experiences like ‘click and collect’, buy now pay later and contactless shopping, thereby, increasing their digital footprint.

A recent research suggested that over 170K New Zealanders experienced online shopping for the first time amid the lockdown in the initial months of 2020. Another study pointed that 50-70% of Kiwi shoppers purchased extra products while online shopping.

With this insight, let us now gaze at the 5 retail stocks making a splash across NZX.

The Warehouse Group Limited (NZX:WHS)

The Warehouse Group Limited was established by Sir Stephen Tindall and at present with 260+ retail stores, it is one of the largest retailing groups across New Zealand with sales amounting to $3 billion.

The Group recorded strong sales performance in January 2021, coupled with efficient cost management and outstanding operational performance. It anticipates adjusted NPAT to surpass $110 million for H1 FY21 in comparison to H1 FY20’s $46.2 million. This would result in an increase in trading gross margin to 185 basis points with closing cash of $183 million.

Read: 7 NZX Stocks Under Lens- TRU, FCG, AMP, ATM, BIT, MEE, WHS

On 19 March 2021, at the time of writing, WHS stock was trading down by 2.51% at $3.490.

Hallenstein Glasson Holdings Limited (NZX:HLG)

Hallenstein Glasson Holdings Limited is one of the leading retailers for women’s fashion. The Company is acclaimed for its vibrant stores and a distinctive fashion sense.

In its trading update for the half-year period ended 1 February 2021, HLG anticipates unaudited PAT between $19.5 million -$20 million, up 28% on pcp. It recorded 13.6 % increase in total group sales to $182 million during the above-mentioned half year period.

With lockdowns in the initial months of 2020, online sales witnessed a surge and were recorded at 24% of sales during the first half of the year. The Company will release its half-year results and dividend distribution in the latter half of March 2021.

READ: Why These 4 Stocks Are Keeping The NZX Abuzz - MCK, APL, FCT, HLG?

On 19 March 2021, at the time of writing, HLG stock was trading up by 0.27% at $7.48.

Briscoe Group Limited (NZX:BGP)

Headquartered at Auckland, the retail chain, Briscoe Group Limited is spread across NZ dealing in Briscoes Homeware, Living & Giving and Rebel Sport.

Amid the uncertain economic conditions caused by COVID 19, Briscoe Group remained resilient and delivered an impressive performance for the year 2020.

The Group sales were reported at $701.8 million, up 7.47% as per the annual statements ended 31 January 2021. Similar upward trends were recorded for the homeware sales and sporting goods sales. NPAT rose by 16.96% to $73.2 million during the year with net cash of $100.4 million at the year end.

This reflects the Group’s strong and robust balance sheet position. Briscoe had paid 6.00 cps as special dividend in January 2021. Further, the Board has agreed to pay final dividend of 13.50 cps on 31 March 2021 to its shareholders.

One major highlight was inspite of the nation-wide lockdown and restrictions, BGP cashed on to the emerging technologies and trends and reported a never before 79.65% increase in online sales which amounted to 18.81% of the group sales.

On 19 March 2021, at the time of writing, BGP stock was trading flat at $5.7.

Kathmandu Holdings Limited (NZX:KMD)

Founded in 1987 by Jan Cameron and John Pawson, Kathmandu Holdings Limited is a transnational retail store chain specialising in outdoor, lifestyle and sports. It comprises of 3 renowned brands – Kathmandu, Rip Curl and Oboz.

The Company provided few updates on its unaudited trading performance for 1HFY21. Total group sales reflected an upwards trend of 12% on previous year for 1H FY21, reflecting the successful acquisition and integration of the iconic brands, Rip Curl and Oboz. Its EBITDA is likely to be in the range $47 million- $49 million. KMD anticipates its group net debt at around $7 million.

Also, the Company witnessed the resignation of its Group CEO, Xavier Simonet. He, however, will continue to work during his notice period of six-months.

On 19 March 2021, at the time of writing, KMD stock trading down by 1.61% at $1.220.

Michael Hill International Limited (NZX:MHJ)

Established in 1979, with its first store in the NZ town of Whangarei, Michael Hill International Limited is a global multi-channel retail jewellery chain.

In its recent declaration of half-year results ended 27 December 2020, Michael Hill revealed an increase of 82.1% in its statutory NPAT to $39 million, when compared to H1 FY20’s $21.4 million. Statutory EBIT jumped to $58.9 million, up 66.9% on pcp. Group margin increased to 62.7% during the period, while MHJ aimed at balancing both margin and sales growth.

Despite the impact of COVID-19, which resulted in loss of 3,709 store trading days, Michael Hill focused on increasing its digital sales, which saw a tremendous rise of 102% resulting in $18.5 million during the six months period. On the contrary, digital sales was recorded only 2.8% of total sales for FY20H1.

The Company announced AU 1.5 cps as interim dividend, payable on 26 March 2021.

On 19 March 2021, at the time of writing, MHJ stock trading flat at $0.700.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)


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